SALGA Coordinated Support to Municipalities 28 January 2014

1. NCOP: Select Committee on Appropriations SALGA Coordinated Support to Municipalities 28 January 2014 Presented By: Cllr M. Nawa Deputy Chairperson 1

2. SALGA MANDATES Representation Employer Body Capacity Building Support and Advisory Role Profiling Role LG Knowledge Hub SALGA 5 YEAR STRATEGIC PLAN 2012-2017 INTER / NATIONAL CONTEXT 1. MDGs & Global Commitments 2. National Dev Plan & other national plans/policies 3. MTSF 4. LGTAS 5. Electoral Mandate (2011) … … Org Capacity Risk APP 3 APEX PRIORITIES: Review of legislative & policy framework impacting negatively on LG. Review of LG fiscal & financial management framework. Improved municipal capacity. • 7 STRATEGIC GOALS • Accessible, equitable, sustainable services • Safe and healthy environment and communities • Coherent local planning & economic development • Effective, responsive and accountable local governance for communities • Human capital development in LG • Financially and organizationally capacitated municipalities • Effective and efficient SALGA administration. SALGA National SALGA Provinces Annual Report Differentiated Approach to Managing and Supporting Local Government

3. Support provided to municipalities on LGTAS priorities Acceleration of Service Delivery • Assisted and advised municipalities w.r.t the assignment of the human settlement function and in particular the assignment agreements with provinces • Currently liaising with Eskom regarding a framework agreement to address municipal areas where Eskom distribute electricity to end users Enhancement of good governance • Developed a guideline for roles and responsibilities of political office bearers & Municipal Manager • Developed a practical guideline for the establishment and functioning of MPACs and attended to training of MPAC members • Training workshops provided in all 9 provinces since 2011. • Assisted municipalities to draft terms of reference for MPAC as well as MPAC as shared service

4. Support provided to municipalities on LGTAS priorities Enhancement of good governance (Cont.) • Developed a guideline on Separation of Functions: A Differentiated Model of Accountability and Oversight • Major cities implementing Separation of Powers model, notably Jhb, Tshwane & Ekurhuleni • Developed a guideline for the Restructuring of Municipalities, to assist municipalities affected by boundary redeterminations • Developed a guideline on mechanisms to improve public participation in addition to ward committees • Provided governance hands-on support upon request by municipalities, including legal opinions on key issues • Assist municipalities in all provinces in with the recruitment and selection process for Municipal Managers and senior managers

5. Oversight Structures in Place

6. Anti-Corruption Summit 2013 • SUMMIT affirmed LGs stance and commitment to lead the fight against corruption. & maladministration • Each municipality (more than 230 municipalities) signed a PLEDGE to institutionalise the fight against corruption and maladministration and act swiftly upon allegations and incidence of malpractice. Progress to date: • Improved oversight and accountability mechanisms in municipalities, such as establishment of MPACs in all municipalities to improve institutional systems and internal controls; • A significant increase in the number of prosecutions and convictions for fraud and corruption across the 3 spheres of govt, including in municipalities; and • The increasing efforts towards professionalisation of the LG sector, including the regulatory initiatives current and forthcoming; • Assisting municipalities to develop their own fraud and anti-corruption strategies and policies.

7. Anti-Corruption Summit 2013 Key outcomes – LG sector collectively agreed to: • Intensify the fight to collectively combat all forms of fraud, corruption and maladministration, including through a revised Anti-Corruption Strategy for LG. • Strengthen LG communication through profiling good practices and improving public education about our successes and measures in place to fight corruption and maladministration. • Strengthen our institutional mechanisms and processes, including the use of information technology, to minimise the opportunities for corruption and maladministration; • Strengthening our oversight capability to be robust and resilient to withstand the forces of corruption and maladministration and increasing the participation of communities in the governance processes of municipalities; and • Intensify the support to municipalities in the appointment of qualified and skilled officials and continue to improve the skills and capacity of councillors and officials to do the right things.

8. Support provided to municipalities on LGTAS priorities Promotion of sound financial management • Adopted 27 financially challenged municipalities to provide hand-on support w.r.t. audit outcomes • Dedicated portfolio based financial training provided to Councillors • Contributed to / participated in development of Credit Control and Debtors Management Policy and training on improving this will be rolled out further • SALGA facilitated the post  implementation review of the Accounting Standards • SALGA led by example obtaining unqualified audit with now other matters (“clean audit”) for 2012/2013)

9. Financially & Organisationally Capacitated Municipalities SALGA Multi-Disciplinary Support Programme to Improve Audit Outcomes • Targeted support to 35 municipalities from all provinces • Internal SALGA capacity and partnerships with public and private sector • There will be four pillars of support

10. Financially & Organisationally Capacitated Municipalities • Engaged 75 municipalities on poor audit outcomes in October 2012 • Municipalities highlighted root causes and signed pledges to improve • Progress is monitored by SALGA Provincial offices and Working Groups: • 7 munics in W. Cape, N. Cape, and N. West assisted on SCM policies and training of bid evaluation committees • 4 munics in Limpopo assisted with filling of vacant CFO and SCM positions • 4 munics in Mpumalanga assisted with action plans to address AG’s findings • Internal Audit supported in 33 municipalities (across various provinces) • Councillor training on oversight role (MMC Finance, MPAC Chairs, Finance Committee members) • 37 municipalities (93 councillors trained) • SALGA Municipal Finance Weeks: • 6 provincial workshops • Focused on Credit Control, improving financial management and audit outcomes

11. Financially & Organisationally Capacitated Municipalities Review of Equitable Share Formula • New formula allocations reflect: • changes in demographics; extent of poverty; and new formula structure • municipalities with high numbers of poor receives highest allocations • New formula allocations reflects revenue raising capacity of different municipalities

12. Through SALGA’s intervention, the Eskom bulk tariff increase was reduced from 16% to 8% which will realise savings for consumers. • That benefits municipalities through better revenue collection rates and potentially higher profits. Financially & Organisationally Capacitated Municipalities

13. Financially & Organisationally Capacitated Municipalities

14. Human Capital Management in LG • A Centre for Leadership and Governance was adopted by the SALGA NEC. The Centre was further endorsed by the sector at the HRM& D Conference which took place from 5-6th March 2013. • The Centre for Leadership and Governance is a result of the need to have an integrated approach towards building leadership in local government and is borne out of recognition that real transformation in the sector will only be realised if we are able to build efficient, accountable and capable leadership. • A research team has been appointed to work with SALGA in order to evaluate the feasibility of establishing a SALGA Centre for Leadership and Governance – the report will highlight the most feasible institutional model/s which could be a combination of brick-and-mortar on the one hand and a virtual college on the other. • Unlike the School of Govt (to be launched by PALAMA) the SALGA Centre for Leadership and Governance has LG Senior Managers and Political Leadership as its target audience.

15. Human Capital Management in LG • Research on term-based wages and salary agreement was concluded in April 2012. The impact of the research was to adequately prepare for the SALGA position during negotiations on matters relating to affordability, macro-economic policies, inflation, productivity and comparability. • On 27 July 2012, a collective agreement on salary and wages was concluded and signed. This has resulted in a more stable sector with the percentage increases being resolved for the next three years. • A SALGA delegation was invited to make presentation to Parliament on its position on LRA and BCEA Amendments on 31 July 2012. Subsequent to the presentation, the Committee requested further written submissions which was complied with. • SALGA played a representative role in ensuring the views and opinions of local government are taken into account in the amendment of Labour Legislation. • SALGA is nominated to participate in the single public service task team of NEDLAC. A request was sent to the Director General of the Department of Labour motivating for SALGA to participate at NEDLAC and ILO. • The intent of the SALGA representation is to ensure that views and opinions of LG are taken into account at NEDLAC and ILO processes.

16. Capacity Building Human Capital Management in Local Government

17. Councillor Induction Programme (CIP) The Councillor Induction Programme (CIP) is aimed at ensuring that newly elected and deployed councillors are capacitated with a general understanding of their leadership role, legislation that guides LG, key municipal processes, the developmental LG system and service delivery imperatives.

18. Local democracy & local governance learning programme (LODLOG) • The LG and Local Democracy (LODLOG) Programme focuses on leadership development, peer learning and experiential exposure for municipal leaders within the areas of local democracy and Local Governance • is targeted at senior politicians and municipal officers on district, local and ward levels of the South African local government structures.

19. National & Advanced Certificate in Municipal Governance • This LG capacity-building programme was developed by the SANLAM Centre for Public Management and Governance at the University of Jhb in cooperation with SALGA and LGSETA to drive: • Improved knowledge and understanding of context / dynamics of general developmental LG; • Improved personal development within the context of a public service ethos and access to more advanced education and training opportunities, and the strengthening of LG professionalism; • Acquiring/enhancing advanced competencies in different areas of Municipal Governance to improve the quality of local government services delivery • Professionalization of LG and management • Improved marketability and employability of learners especially within the operational functioning of local government in South Africa, but also in other public sector agencies / private sector.

20. Local government labour relations management The objective of the Local Labour Forum( LLF) Training Programme is to ensure that municipal leaders charged with labour relations management at a local level are empowered with the necessary knowledge, skills and commitment to engage meaningfully in the management of the labour relation environment in municipalities.

21. Univ of Fort-Hare certificate Programmes for Cllr Academic Development The overall objective of the programme is to improve the academic qualifications of selected cllrs and to enable them to articulate to higher qualifications that are in line with their oversight and governance responsibilities.

22. Execute local leadership and governance coaching • This programme is targeted at political leaders & senior officials who are in municipalities identified as experiencing leadership /governance challenges . • The programme has recently been launched with a workshop that was conducted for Eastern Cape municipalities from 21-23 January 2014, to be followed thereafter by Limpopo, North West, Mpumalanga and KZN municipalities. • Subject to a funding injection by the LGSETA, programme will be expanded on a nation-wide basis including cascading down to affected municipalities directly.

23. Capacity Building Programmes Awaiting Funding from LGSETA The following capacity building programmes targeted at municipal cllrs await funding approvals from the LGSETA before they are rolled : Executive Local Leadership and Coaching Programme (extension of programme referred to above to target municipal specific leadership development and coaching objectives). Portfolio Based Cllr Development Programme (an accredited training programme that extends Councillor development objectives initiated through the CIP, but with a lot more focus on portfolio - based empowerment of Councillors. Media Liaison and Communications Programme for Municipal Leaders( a newly conceptualised programme aimed at the development of municipal leaders to improve their media and communication skills). Establishment of SALGA Centre for Leadership and Governance (subject to finalisation of business plan and submission of funding proposal to LGSETA).

24. Competition Commission’s Investigation into Bid-Rigging OUTCOME OF COMMISSION’S INVESTIGATION Commission on 24 June 2013 announced that: • It reached settlement agreement with 15 of 21 companies it had been investigating. • 3 construction companies did not accept the competition’s settlement offer. • Remaining 3 firms received “immunity”. • 300 projects worth estimated R 47 billion - 160 prescribed & 140 projects eligible for settlement – limited to projects concluded after Sept 2006 • Public sector (R28 billion) and Private sector (R19 billion). • Fined a collective penalty of R1,46 billion. ADMISSIONS OF COLLUSIVE TENDERING INCLUDED THE FOLLOWING: • Determining, maintaining and monitoring collusive agreements; • Meeting to divide the markets and agree on margins; • Coordinating tenders over different projects / submitting sham tenders; • The company that won a tender to pay the losing bidders a “loser’s fee” to cover their costs of bidding; and • Sub-contracting to compensate losing bidders.

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26. Competition Commission’s Investigation Into Bid-rigging COMPETITION COMMISSION WAY FORWARD • 15 companies that accepted settlement offers fined collective penalty of R1,46 bill • The different individuals penalties of the 15 companies range between 1 - 5,7 % of their 2010 annual turnover. • These fines are lower than the 10% that can be imposed as a penalty. • Settlement agreements were tabled before the Competition Tribunal for confirmation. • Competition Tribunal convened from 17 – 18 July 2013 to consider settlement with view to have them made an order of the Tribunal. COMPETITION TRIBUNAL Central point intervention application was to make submissions on whether the fines imposed on the various firms were appropriate : REASONS?:- • First is that objectively viewed, the fines are too small and do not give sufficient weight to the harm caused to the public interest by the prohibited conduct. • Second is that in negotiating and imposing the fines, the Commission departed materially from the provisions of its own construction sector fast track policy.

27. Competition Commission As SALGA, we remain seized with the matter with the following options for SALGA and its members: • Request reasons from the Competition Tribunal for the dismissal of the application; • Lodge a formal application for the disclosure and release of all relevant information by the Commission, including those related to projects not disclosed by the Commission and where indemnity has been granted to construction companies; • Await the certification by the Tribunal of the Settlement Agreements and use these to institute civil action against the construction firms.

28. Sector Feedback & Way Forward Critical for SALGA to measure sector’s satisfaction with our support programmes: • The municipalities submitted very positive feedback for SALGA and our support initiatives. • They highlighted that we are visible at a local level; are responsive to their needs and our support is highly valued. • The support highlighted was in particular reference to technical support and cllr training. • We will continue to strengthen our support to the sector in key targeted areas, in particular getting the executive leadership and governance coaching and academy going.

29. THANK YOU